Today, there are so many opportunities to invest on your own. You can easily and cheaply set up an online account to trade securities, like stocks. Some online services, for a minimal fee, will also provide you with a detailed financial plan you can use to guide all your long-term investments.
The digital age and the arrival of all these financial advice services even have some people questioning the value of working with a financial advisor. Before jumping to that conclusion, you may want to consider all the potential benefits an experienced financial advisor can provide.
Expertise. The investment world has become incredibly complex. A licensed financial advisor receives ongoing training and licensing that helps them develop expertise on the financial markets and the strategies for devising financial plans that will serve their clients’ personal preferences, personalities, and long-term goals.
Experience. When you begin managing your finances on your own, it will likely be the first time you have faced many of these choices. A financial advisor has addressed those challenges for many clients. If you need to set up a college-savings plan for a child, for example, or figure out how to transition financially into retirement, an advisor will probably already have worked with many people in the same circumstances.
A rational check on your emotions. Emotions often overtake investors during turbulent markets. In up markets, investors often want to buy more and in down markets, the natural urge is to sell everything. Giving in to emotions and overreacting to short-term market events, though, can totally disrupt a long-term financial plan. A financial advisor, who has lived through many market swings or at least is fully cognizant of the data, can often be a voice of reason that will help you determine what is the wisest approach to take in response to any short-term market fluctuations.
A sounding board. With a financial advisor, you also have someone to run ideas by. New investment trends emerge all the time. You can even ask your advisor to help you keep up-to-date with them. Your advisor will also serve as the objective party who can let you know if some new trend is worth your investment, or whether they think it’s a fad and you may be better served by staying off whatever that latest bandwagon happens to be. They can also help you stay organized with paperwork, including keeping your beneficiaries up to date, or reevaluating your priorities when a major life event takes place.
As with many of life’s endeavors, it can help to have an expert alongside you who can offer guidance through all the developments you’ll encounter and all the decisions you’ll have to make along the way.